Linking the EU emissions trading scheme: economic implications of allowance allocation and global carbon constraints

We investigate the role of domestic allowance allocation and global emissions constraints for the carbon-market impacts of linking the EU Emissions Trading Scheme (ETS) internationally. Employing a quantitative simulation model of the global carbon market, we find that the economic benefits from connecting the European ETS to emerging non-EU schemes strongly depend on the regional allowance allocation of the linking participants: In a world of moderate carbon constraints, an economically efficient regional allowance allocation induces a much stronger fall in total compliance costs than a sub-optimal (i.e. too high) domestic allocation of emissions permits. However, a more efficient (i.e. stricter) allocation shifts abatement efforts and compliance costs to energy-intensive industries which are covered by the domestic ETS. We further find that committing to ambitious global emissions reduction targets (compatible with stabilizing CO₂ concentrations at 450 ppm) induces much stronger regional abatement efforts and substantially higher compliance costs for the abating regions. In such an ambitious climate policy regime, an efficient domestic allocation of allowances is even more important from an economic perspective: Here, linking emissions trading schemes diminishes the associated compliance costs on the largest scale.

Fairness aspects of linking the European emissions trading scheme under a long-term stabilization scenario for CO2 concentration

Climate equity is a crucial but difficult element in negotiations on a post-2012 climate regime. With respect to the trading of greenhouse gas emissions the equity aspect is considered in the Kyoto Protocol which demands that emissions trading should be supplemental to domestic abatement efforts. The question arises whether a linking of the European Union Emissions Trading Scheme (EU ETS) to non-EU emission trading schemes or the Clean Development Mechanism (CDM) could have an impact on principles of climate justice and thus potentially affect ongoing negotiations. In this study, we present the results of a three step analysis: In a first step, it estimates mid-term greenhouse gas emission entitlements for Annex B and Non-Annex B countries for the year 2020 which keep within reach a stabilization of the CO₂ concentration at 450 ppmv in the long-term. In the second step, the resulting emission entitlements are used as an input to an economic partial-equilibrium model in order to assess the shift of abatement efforts under different scenarios of linking the EU ETS. In a third step, we analyze the outcome of the economic model with respect to the future trend of European per capita emissions under the current EU ETS relative to different scenarios of linking the EU ETS. The model results indicate that European per capita emissions have to be reduced to a considerably smaller extent if a linking of the EU ETS is accompanied by an optimal design of the National Allocation Plans and if low-cost CO₂ permits became available via the CDM to a large extent.

Assessing the dynamic efficiency of internal mitigation projects. An evolutionary perspective

Internal mitigation projects have recently been proposed as an additional flexibility mechanism, particularly in the context of the European Union. Their main objective is to engage sectors not included in the European Union emissions trading scheme (EU ETS) in cost-effective emissions reductions. However, in this paper it is argued that, when assessed in terms of dynamic efficiency, the instrument is likely to be, at best, irrelevant to induce the scale of systemic technological changes which are required to tackle the climate change problem and, at worst, detrimental for this task. Insights from the Evolutionary Economics of technological change complemented with political economy considerations are used to support this claim.

Linking the Northeast states of the US mitigation program to the EU Emission Trading Scheme—Implications and costs

It is argued that there are at least five reasons for the Northeast states of the United States to implement a regional emission trading scheme for carbon dioxide despite the lack of federal policy regulations: goodwill, learning, political influence, risk management and competitiveness interests. Using an energy-economy model, the carbon price to bring the firms into compliance with a 10% reduction by 2020 is estimated to be 20-150 US$ per ton C. There have been discussions about linking the ongoing EU Emission Trading Schemes to the Northeast state initiative. The prime argument is that such a linkage would encourage a change of the federal US policy, which has traditionally followed action taken at the state level. Emissions trading with binding mitigation commitments could thus be demanded and accepted also on federal level. This paper demonstrates that the impact of linkage on permit prices depends on the reduction target in the European scheme: A low EU target results in a net flow of permits to the Northeast scheme, while a 40% EU reduction target results in a net flow of permits from the Northeast. Flow of permits from the Northeast state must be compensated for by the EU because the United States is not a party of the Kyoto Protocol. The EU must therefore buy permits in allowances recognized in the Kyoto regime in an amount equal to the net flow of permits from the Northeast states.

Advancing the climate regime through linking domestic emission trading systems?

More and more countries are incorporating the instrument of emissions trading into their national climate policies. This emerging mosaic of emissions trading schemes (ETS) raises the question of whether they should be linked with each other. From an economic point of view, linking of domestic schemes is supposed to increase the economic efficiency of carbon markets. In addition, linking is also expected by some to yield substantial political benefits in terms of the evolution of the UNFCCC/Kyoto regime. However, these optimistic prospects are based on a best-case scenario where all major countries establish environmentally effective emissions trading systems and then link them with each other. Real-life politics might develop rather differently. This paper therefore examines to what extent the current status of emissions trading in industrialised countries provides a basis for reinforcing and moving forward the international climate regime through linking domestic ETS. After comparing emerging emissions trading schemes from an institutional perspective, it emerges that not only emissions trading is at a very early stage in most countries, in addition the emerging systems are probably going to be designed very differently from the EU ETS. While for some design features such as the coverage design differences do not matter, there are some areas where the plans in many non-EU countries look crucially different from the EU system. The outlook for a linked international ETS is therefore currently still very uncertain. Given this state of affairs, the EU should pro-actively engage with the non-EU countries to try to harmonise their developing national emissions trading schemes with the EU ETS, widely disseminate the lessons it has learned from the EU ETS, strongly make the case for environmental integrity and at the same time make clear that systems that want to link to the EU ETS will need to meet certain quality criteria.

Ensuring the environmental effectiveness of linked emissions trading schemes over time

Linking emissions trading schemes allows the combined emissions cap to be achieved at lower cost. Linking is usually environmentally neutral, but some design features can lead to higher aggregate emissions if schemes are linked. Technical solutions to limit the potential emissions increases due to design differences implemented when schemes are linked are not sufficient to ensure the environmental effectiveness of the linked schemes over time. Technological, economic, administrative and other changes that can lead to higher aggregate emissions are inevitable. The administrators of the linked schemes must ensure the stringency of the emissions cap relative to the “business as usual” emissions of affected sources, the accuracy of the emissions reported by affected sources, the integrity of the allowance registry, effective compliance enforcement, and the environmental integrity of the credits issued for emission reduction projects over time. This will require a process for agreeing on revisions to the regulations of the linked schemes, a mechanism to provide assurance of the environmental effectiveness of each of the linked schemes, and a procedure for terminating the linking agreement.

Foresty offsets in emissions trading systems: a link between systems?

An important aspect in the linking of different emissions trading schemes is the degree to which these systems allow (or ban) external offset project categories. The EU Emission Trading Scheme (EU ETS) currently allows the use of credits from energy and industry projects developed under the Kyoto Protocol’s Joint Implementation (JI) and Clean Development Mechanism (CDM) but excludes the use of carbon credits from forestry projects for compliance in the EU ETS. Forestry credits generated by the CDM have a limited lifetime and expire at the end of a project’s crediting period, or earlier if the carbon stock for which the credits have been issued ceases to exist. According to the recently adopted amendment of the EU ETS Directive forestry credits will remain to be excluded until 2020. The present article reviews how the New South Wales Greenhouse Gas Abatement Scheme (Australia), the Regional Greenhouse Gas Initiative (US) and the voluntary scheme of the Chicago Climate Exchange integrate forestry offsets into the respective system and how they deal with the risk of losing stored and credited biomass. By comparing the results of different scenarios this article shows how differences in the treatment of forestry offsets could impact the efforts to link various emission trading systems in future.

Challenges and opportunities of a post-Kyoto mitigation regime: a survey of the European electricity sector

This paper empirically shows how the uncertainty associated to the absence of a mitigation regime which follows the United Nations Framework Convention on Climate Change Kyoto Protocol (UN FCCC Kyoto Protocol) is affecting investments in abatement activities in the EU electricity sector and, thus, future emissions levels. Based on a survey of EU electric utilities, it identifies the most likely post-Kyoto scenarios considered by them and how they are coping with such uncertainty in their investment decisions. It is found that firms react differently to such uncertainty and adopt different strategies to cope with it, diversifying their emissions control activities. Although most companies foresee post-Kyoto compliance regimes with emissions trading systems, they differ in their perceptions of the form that a post-Kyoto regime could take and are, thus, positioning differently to face such regime. The particular features of each company and the country where they operate affect their perception of the uncertainties, their position regarding a possible post-Kyoto regime and their inclination to carry out mitigation activities. Complying with Kyoto (and, eventually, post-Kyoto) targets significantly influences the investment decisions of European electricity companies. Uncertainty about a post-Kyoto regime may already be affecting investments in mitigation activities in the electricity sector. Therefore, significant progress has to be made in the definition of a post-Kyoto regime. It is urgent to define and agree internationally the emissions reduction objectives and the mitigation instruments that will be accepted for compliance, ensuring continuity of the international emissions trading system foreseen in the Kyoto Protocol.

The interaction between emissions trading and renewable electricity support schemes. An overview of the literature

The public promotion of electricity from renewable energy sources coexists in many countries with the recent implementation of emissions trading schemes. As shown by several papers, this coexistence may lead to significant interactions between both instruments, in the form of synergies and conflicts. This paper provides an overview and analysis of the literature on such coexistence and interactions. A major conclusion is that policy measures aiming at exploiting the synergies between both instruments should be implemented. The greatest synergy effects from the use of both instruments take place through appropriate coordination of their targets. Another key finding is that, although some stylised facts can be inferred from the studies, some results from those complex interactions are context-specific since they depend on the design of the instruments in particular countries. In spite of the significant policy implications of such interactions for the effective and cost-effective functioning of both instruments, this is a surprisingly under searched field. It is so concerning, both, theoretical and empirical analysis.

Greenhouse gas mitigation in developing countries through technology transfer?: a survey of empirical evidence

While greenhouse gas (GHG) emissions are projected to rise primarily in the developing countries, the potential for developing new GHG mitigation technologies exists primarily in the industrialized countries. It is thus important, not only for predictions about future emission paths but also for climate change mitigation policies, to understand how the international diffusion of such technologies takes place and how it affects the energy infrastructure and GHG emissions in developing countries. This paper provides an overview of the channels through which these technologies diffuse and focuses on the empirical evidence pertaining to the effects these technologies have on GHG emissions in developing countries.

Approaches to semi-synthetic minimal cells: a review

Following is a synthetic review on the minimal living cell, defined as an artificial or a semi-artificial cell having the minimal and sufficient number of components to be considered alive. We describe concepts and experiments based on these constructions, and we point out that an operational definition of minimal cell does not define a single species, but rather a broad family of interrelated cell-like structures. The relevance of these researches, considering that the minimal cell should also correspond to the early simple cell in the origin of life and early evolution, is also explained. In addition, we present detailed data in relation to minimal genome, with observations cited by several authors who agree on setting the theoretical full-fledged minimal genome to a figure between 200 and 300 genes. However, further theoretical assumptions may significantly reduce this number (i.e. by eliminating ribosomal proteins and by limiting DNA and RNA polymerases to only a few, less specific molecular species). Generally, the experimental approach to minimal cells consists in utilizing liposomes as cell models and in filling them with genes/enzymes corresponding to minimal cellular functions. To date, a few research groups have successfully induced the expression of single proteins, such as the green fluorescence protein, inside liposomes. Here, different approaches are described and compared. Present constructs are still rather far from the minimal cell, and experimental as well as theoretical difficulties opposing further reduction of complexity are discussed. While most of these minimal cell constructions may represent relatively poor imitations of a modern full-fledged cell, further studies will begin precisely from these constructs. In conclusion, we give a brief outline of the next possible steps on the road map to the minimal cell.

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Sustainable development as a framework for developing country participation in international climate change policies

The paper presents a number of ideas on how climate change policy implementation in developing countries can be supported by alternative international cooperation mechanisms that are based on stakeholder interests and policy priorities including broader economic and social development issues. It includes a brief review of current development policies, technological research and promotion efforts, and climate change that demonstrates that mutual policy initiatives undertaken by governments and the private sector actually have major positive impacts on climate change without being initiated by this global policy concern. Furthermore a number of examples are given on how future development objectives in Brazil, China, and India jointly can support economic and social goals and global climate change concerns if these goals are taken into consideration and supported by international cooperative mechanisms. The paper proposes international cooperative mechanisms that can support the implementation of integrated development and climate change policies. The mechanisms include an international sustainable development (SD) and Climate Finance Mechanism (SDCFM), technology development and transition programmes, technology standards, and other measures.

Setting greenhouse gas emission targets under baseline uncertainty: the Bush Climate Change Initiative

There is substantial uncertainty regarding baseline greenhouse gas (GHG) emissions forecasts—i.e., how GHG emissions will grow over time in the absence of policy intervention. Thus baseline uncertainty should be a key consideration in setting GHG emissions targets as a mitigation strategy to respond to global climate change. At a minimum, the emissions target must be less than the baseline level to induce changing behavior and new investment. Despite this fundamental policy criterion, baseline considerations have played only a minor role in target setting under international climate policy. Baseline uncertainty applies to both absolute and intensity based emissions targets. It is demonstrated that one advantage of intensity targets is reduced uncertainty in the projected baseline, however there will always be some residual uncertainty in model projections. To illustrate the importance of considering baseline uncertainty in GHG target setting, the Bush Climate Change Initiative is analyzed against its projected baseline as a case study of a modest intensity target. Based on comparison with historical data, the range of projections by major energy-economic models, past discrepancies in the accuracy of model projections and the added complexity of sector-specific drivers for non-CO₂ GHGs, it is shown that the Bush Initiative cannot be guaranteed or even expected to deliver actual reductions against an uncertain baseline. This finding emphasizes the importance of setting a target that accounts for baseline uncertainty to achieve genuine mitigation of GHG emissions.

Disulfide connectivity and reduction in pheromone-binding proteins of the gypsy moth, Lymantria dispar

Males of the gypsy moth, Lymantria dispar, are attracted by a pheromone released by females. Pheromones are detected by olfactory neurons housed in specialized sensory hairs located on the antennae of the male moth. Once pheromone molecules enter the sensilla lymph, a highly abundant pheromone-binding protein (PBP) transports the molecule to the sensory neuron. The PBPs are members of the insect odorant-binding protein family, with six conserved cysteine residues. In this study, the disulfide bond connectivities of the pheromone-binding proteins PBP1 and PBP2 from the gypsy moth were found to be cysteines 19–54, 50–109, and 97–118 for PBP1, and cysteines 19–54, 50–110, and 97–119 for PBP2, as determined by cyanylation reactions and cyanogen bromide chemical cleavage. We have discovered that the second disulfide linkage is the most easily reduced of the three, and this same linkage is missing among four cysteine-containing insect odorant-binding proteins (OBPs). We are the first to identify the unique steric and electronic properties of this second disulfide linkage. Electronic Supplementary Material  Supplementary material is available for this article at

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Impact of bioenergy crops in a carbon dioxide constrained world: an application of the MiniCAM energy-agriculture and land use model

In the coming century, modern bioenergy crops have the potential to play a crucial role in the global energy mix, especially under policies to reduce carbon dioxide emissions as proposed by many in the international community. Previous studies have not fully addressed many of the dynamic interactions and effects of a policy-induced expansion of bioenergy crop production, particularly on crop yields and human food demand. This study combines an updated agriculture and land use (AgLU) model with a well-developed energy-economic model to provide an analysis of the effects of bioenergy crops on energy, agricultural and land use systems. The results indicate that carbon dioxide mitigation policies can stimulate a large production of bioenergy crops, dependent on the level of the policy. This production of bioenergy crops can lead to several impacts on the agriculture and land use system: decreases in forestland and unmanaged land, decreases in the average yield of food crops, increases in the prices of food crops, and decreases in the level of human demand of calories.

Fishery livelihoods and adaptation to climate change: a case study of Chilika lagoon, India

Climate change combined with human activities poses significant risks to people’s livelihood especially in developing countries. Adaptation at the community level is of crucial importance in enabling them to respond to the direct and indirect effects of changes in climate. In a case study of fishing communities in Chilika lagoon, India, the focus is made on understanding climate change adaptation at the community level and scaling it up into the policy perspective through application of Sustainable Livelihood Approach. This article challenges the research and policy community to encourage the identification of locally negative constraints and positive strengths toward climate resilient communities in rural areas.

“Bicellar” Lipid Mixtures as used in Biochemical and Biophysical Studies

Over the past decade “bicellar” lipid mixtures composed of the long-chain dimyristoyl phosphatidylcholine (DMPC) and the short-chain dihexanoyl PC (DHPC) molecules have emerged as a powerful medium for studying membrane associated, biologically relevant macromolecules and assemblies. Depending on temperature, lipid concentration and composition these lipid mixtures can assume a variety of morphologies, some of them alignable in the presence of a magnetic field. This article will examine the biophysical studies that have elucidated the various morphologies assumed by these lipid mixtures, and their use in the biochemical studies of biomolecules.

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Development of an agroforestry carbon sequestration project in Khammam district,India

This paper addresses methodological issues in estimating carbon (C) sequestration potential, baseline determination, additionality and leakage in Khammam district, Andhra Pradesh, southern part of India. Technical potential for afforestation on cultivable wastelands, fallow, and marginal croplands was considered for Eucalyptus clonal plantations. Field studies for aboveground and belowground biomass, woody litter, and soil organic carbon for baseline and project scenarios were conducted to estimate the carbon sequestration potential. The baseline carbon stock was estimated to be 45.3 t C/ha, predominately in soils. The additional carbon sequestration potential under the project scenario for 30 years is estimated to be 12.8 t C/ha/year inclusive of harvest regimes and carbon emissions due to biomass burning and fertilizer application. Considering carbon storage in harvested wood, an additional 45% carbon benefit can be accounted. The project scenario has a higher benefit/cost ratio compared to the baseline scenario. The initial investment cost requirement, however, is high and lack of access to investment is a significant barrier for adoption of agroforestry in the district.

An abelisaurid from the Late Cretaceous of Egypt: implications for theropod biogeography

Recent paleogeographic scenarios postulate the isolation of continental Africa during the Late Cretaceous. The absence of abelisaurid theropods from Upper Cretaceous African strata was offered as support of hypothesized African isolation with the acknowledgement that the paucity of African abelisaurids may be mostly an issue of sampling. Here we report on a shed theropod tooth from the Upper Cretaceous (Maastrichtian, ∼70 Ma) Duwi Formation of Egypt. The tooth was referred to the Malagasy abelisaurid “Megalosaurus” crenatissimus (=Majungasaurus crenatissimus) in 1921. A discriminant function analysis was run to test for morphological congruence between the Egyptian tooth and the dentitions of 24 theropod taxa. The analysis correctly classified 96.6% of the teeth in the sample and assigned the tooth to Majungasaurus. As current paleogeographic reconstructions posit Madagascar had attained its current position relative to Africa before the Late Cretaceous, it is unlikely that the Egyptian tooth actually pertains to Majungasaurus. Nevertheless, its classification as an abelisaurid supports its referral to the clade. This tooth thus constitutes defensible evidence of an abelisaurid from the post-Cenomanian Cretaceous of mainland Africa. Combined with recent discoveries of abelisaurids in Niger and Morocco, the result indicates that Abelisauridae was a diverse group in Africa during the Cretaceous, existing in multiple places for at least ∼25 Ma and weakens support for hypotheses of an isolated Africa during the Late Cretaceous.Electronic Supplementary Material  Supplementary material is available for this article at

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Land use change and forestry climate project regional baselines: a review

Climate change programs have largely used the project-specific approach for estimating baseline emissions of climate mitigation projects. This approach is subjective, lacks transparency, can generate inconsistent baselines for similar projects, and is likely to have high transaction costs. The use of regional baselines, which partially addresses these issues, has been reported in the literature on forestry and agriculture projects, and in greenhouse gas (GHG) mitigation program guidance for them (e.g., WRI/WBCSD GHG Project Protocol, USDOE’s 1605(b) registry, UNFCCC’s Clean Development Mechanism). This paper provides an assessment of project-specific and regional baselines approaches for key baseline tasks, using project and program examples. The regional experience to date is then synthesized into generic steps that are referred to as Stratified Regional Baselines (SRB). Regional approaches generally, and SRB in particular explicitly acknowledge the heterogeneity of carbon density, land use change, and other key baseline driver variables across a landscape. SRB focuses on providing guidance on how to stratify lands into parcels with relatively homogeneous characteristics to estimate conservative baselines within a GHG assessment boundary, by applying systematic methods to determine the boundary and time period for input data.